Should You Wait and Save for a Larger Down Payment or Should You Purchase Now?

Posted on May 29, 2013 by Jesse

One of the most common questions asked regarding real estate is whether a first-time buyer should jump into the Toronto real estate market now or wait until a larger down payment is saved up. In most cases the answer is going to be to jump right in as fast as you can and here’s why.

Most people that are saving up to buy a new home are paying rent at the same time. The small amount that they’re able to put away to increase the size of their down payment isn’t a lot. While a person continues to save up this small extra, the home values continue to rise. He also never knows when interest rates can rise in the future.

As soon as you make a Toronto house purchase, you’ll be starting to build up equity in the home. When you do run across extra money, you’ll be able to put it towards paying off your home sooner. Getting started with real estate is always the most difficult part of the process. It’s a lot easier to buy your second, third and fourth home than it is your first. It’s all about taking that initial first step as soon as you have enough money ready to make a down payment.

If you’re not able to afford a single-family dwelling right away, there are plenty of duplexes, townhouses and Toronto condos on the market that can act as a stepping stone towards a larger home in the future. You’ll want to make sure that you are entering the market at a level that’s easily affordable for you.

Getting into the Toronto market can be challenging for many especially if they are trying to dive right into the deep end without testing the water first. Most people aren’t able to buy a large single-family home when they’re making their first purchase and have to start on a smaller scale.

You may also want to consider co-ownership of real estate in Toronto along with a friend or family member. With the rising prices of real estate here in Toronto and across Canada, co-ownership has become a viable solution for many that couldn’t otherwise look at home ownership and would be stuck in a renter’s market for a considerable period of time.

You’ll have to decide whether you’ll be able to save up enough money to outweigh the rising costs of Toronto homes for sale or whether you should just get started now. For most people that are currently renting, the best option is to purchase a property as soon as you possibly can in order to start building up equity right away.